Davos 2011: More people, fewer resources, big risk

Among the major issues global leaders will discuss at the upcoming annual World Economic Forum in Davos are the risks associated with the tightening of water, food and energy resources to meet the demands of an increasing global population.

The three interrelated resources impact both global economic growth and geopolitical stability and the Forum’s Global Risks 2011 report warns that “any strategy that focuses on one part of the water-food-energy nexus without considering its interconnections risks serious unintended consequences.”

Three recent news stories illustrate the risks associated with these precious resources.

Water

The situation in Yemen provides a perfect illustration of the growing problem countries face when it comes to fresh water supplies. Yemen’s population is increasing – exploding really. Currently at 23 million, it’s forecast to double in the next 20 years. Thanks to drought and overconsumption, the water is running out and farmers are abandoning their land for the cities.

A nonprofit network and affiliate of the policy think tank Pacific Institute called Circle of Blue offers 19 solutions to the global freshwater crisis here.

Food

The United Nations Food and Agriculture Organization recently reported that global food prices hit a record high in December. Emerging economies China, India and Brazil are currently experiencing double-digit food inflation, with India’s at 18 percent.

Countries are taking steps to tackle high food prices and avoid protests from their citizens by cutting taxes on food, regulating prices or increasing supplies, because no one wants a repeat of the violent protests that happened when food prices spiked in 2007/2008.

Energy

The chief economist at the Inernational Energy Agency recently warned that rising oil prices could threaten the global economic recovery and add a new inflationary pressure for Asian countries already dealing with food inflation.

Even as industrialized nations try to reduce their dependency on oil and fossil fuels, their efforts to move towards biofuels is resulting in increased demand on water resources. Biofuels require water to grow crops, as well the biofuel production process requires significant water resources.

We’ll be focusing on the other main themes of Davos 2011 in upcoming blog posts.

A shopper buys food at a market in Kuala Lumpur January 12, 2011. Surging global food prices are an extra headache for emerging markets battling inflationary pressures, but they are unlikely to trigger a radical response by economic policymakers. REUTERS/Bazuki Muhammad